Locals speak of situation worsening 'by the hour' in descent far more rapid than Greece's
'It's worse than a war. At least in a war you know who your enemies are," said Thanassis Iracleous, standing behind a till as he discussed the escalating crisis in Cyprus. "On Friday they were our friends," railed the pharmacist, whispering the word "German" in the same breath. "The very next morning they were suddenly our enemies."
As wars go, the bespectacled Greek Cypriot is having a good one. Relatively speaking. On Thursday, six days into the island nation's worst economic debacle in decades, Iracleous was still accepting credit cards and customers were still walking through the doors of the chemist he runs in the heart of Nicosia. But it is not clear how long he will be able to keep this up.
That is more than can be said for most retailers in Cyprus, the latest frontline in the eurozone's ever bloody conflict of sovereignty and debt. With the country's solvency hanging by a thread in the wake of the Cypriot parliament's overwhelming rejection of the tough terms attached to financial rescue from the EU and IMF, panic has gradually replaced anger and the shock born of the brutal realisation that bankruptcy is no longer an abstract concept.
"Today, suppliers began demanding payments in cash," said Iracleous, shaking his head incredulously. "Almost no one is accepting credit cards or cheques any more because everyone is saying that come Tuesday the game will be over. Our banks will have closed."
Societies fending off default descend into chaos by stages. Poverty hit Greece after successive rounds of austerity. Over the course of three years of tumult and despair, helplessness followed hopelessness.
In Cyprus, the former British colony that prided itself on its spectacular economic recovery nearly 40 years after Turkey invaded and seized the island's northern third, the descent has been more dramatic for being faster still. Locals speak of a situation worsening "by the hour". In towns across the island's southern sector, the panic spawned by uncertainty was underscored on Thursday by the long queues outside banks as fearful depositors rushed to withdraw cash from ATMs. "The radios, today, were full of talk that next week Laiki may not exist," said Kypros Kyprianou, standing patiently in line outside a branch of the bank on Diogheni Akritas, one of the capital's major avenues. "I'm waiting here till I get my cash," he continued.
"On Saturday, ATMs were giving out €800. Now you can't get more than €400 and already I've been in line for over a hour because the machine is only dispensing €40 at a time."
A 38-year-old carpenter, Kyprianou is proud that all 56 of Cyprus's MPs resoundingly rejected the bailout deal which, in an unprecedented step, stipulated that ordinary depositors pay part of the bill. "We are not like the Greeks who just sign up to whatever these people [the EU and IMF] dictate," he boasted. "We can say no."
But ever since the eruption of this latest stage of the crisis, the carpenter has been out of work. "There is no liquidity. The market has dried up. I was meant to get a deposit for a big project on a house on Saturday and it just fell through," he said, "just like that."
Vassos Pratziotis, a graphic designer who like Kyprianou is now withdrawing cash on a daily basis, says what is most worrying is that nobody knows what the future will bring. "There can't not be a solution," he said, drawing on a cigarette. "The problem is we have no idea what it is going to be. I'm very afraid that Laiki will collapse because the bank is my firm's main client and for several months we haven't been paid."
Food shortages are not in evidence. But in a worrying sign on Thursday major chains reported that suppliers were beginning to reduce produce and even withhold goods if payments weren't made in cash. "Many are insisting that we pay up front," said Andriana Anisia, manager of a branch of the local supermarket co-operative Green Tree. "People are clearly panicking. Today, our milk supplies came and they were inexplicably thinner. Who knows what next week will bring?"
Britons who have retired to the island are also expressing alarm. In Nicosia many could be spotted similarly rushing to banks to cancel transfers of their pensions from the UK. "Our biggest worry is that the whole banking system is going to collapse, not just one or two banks," said one, Francis Colley. "I called my pension fund and they said they are very concerned about the situation in Cyprus. Very, very concerned."
The streets of Nicosia have fallen eerily quiet with the intensification of the showdown. Uncertainty over the financial lifeline is such that no one has much appetite for anything, locals say. "Even if you have work, your mind is somewhere else," said Pratziotis. "Everyone is numb, really, with worry."
In his pharmacy, Iracleous, like many Greek Cypriots, laid the blame squarely with Berlin. "It's very simple. It's all about money," he said. "In this case Germany wanting to control the Russian oligarchs who have invested in our banks. If they leave Cyprus, which is what Merkel wants them to do, they will have to go somewhere else. Germany will be the top of that list. What we in Cyprus have learned is that you have to be very careful of your friends."
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